By on May 23, 2013

I can't tell a lie - Picture courtesy Pandodaily.com

When Autoblog was invited to one of those hurried and harried press conferences at the Shanghai Auto Show, and asked GM China president Bob Socia about car exports from China to America, they were told:

“It could very well happen. It could very well happen. You know, I’m not sharing any plans with you, but we try to keep open as to what makes sense … We’re open to be doing that. There’s no reason why we can’t be exporting to the States.”

We gave the matter short shrift. We know China-made Honda Fits are in Canada and elsewhere without giving people fits. Also, we have been following GM China’s export activities for many years. GM started exporting the Sail from China in 2010, making it “the first time a world-class automaker will export from China a model it developed in the country,” as the Nikkei said. Actually, it was GM that got China’s heretofore sputtering auto export machine going.

For some folks, like Chris Butler at the Franklin Center’s Watchdog site for Tennessee, GM’s exports from China were new. Butler called GM and asked whether China will become an export base for the General: He reached spokesman Greg Martin, who said:


“There will be no exports of these cars built in China. Cars that are built in China are sold in China.”

When asked about Ed Niedermeyer’s Wall Street Journal op-ed that said that “GM is targeting 100,000-plus exports of Chinese-made cars this year” Martin backpedaled, saying:

“Well, some of those vehicles may go to Indonesia, Taiwan or Korea. I don’t know if it’s 100,000 plus, but those places I just cited are also bases for smaller Asian markets over there for us.”

The spokesman did not know what he was talking about. He was wrong about 1) no exports of cars built in China, and 2) the Chinese exports only going to Asian markets. As a matter of fact, GM has been exporting from China for a decade:

2002: Shanghai GM to Export Engines to Canada:”The export of engines to North America represents a milestone for China’s most advanced automaking facility.”

2006: GM Bets China Will Become Crucial Export Base:GM sends engines made by one of its joint ventures with state-controlled Shanghai Automotive Industry Corp. to its plants in Canada and the U.S. The partners have also exported small numbers of Chevrolets, designed by a GM affiliate in South Korea, from China to Russia and Chile.”

2010: Shanghai-GM: Chevrolet Sails to Chile and Libya: “The passenger car joint venture of SAIC and General Motors said that it has received initial order for close to 10,000 Chevy Sails from countries outside China, mainly Chile and Libya.”

2012 (GM Annual Report): “Export sales from China reached 76,000 units in 2012 and are expected to reach 100,000 units in 2013

2013: General Motors accelerates China push: …”[Bob Socia, who runs GM of China] said …GM plans to boost its exports from China to 300,000 by 2015. This year the company expects to export between 100,000 to 130,000 vehicles.”

2013: “Through its China-based business, GM exports vehicles such as the Chevrolet Sail to other markets, including South America and the Middle East.

2013: “Shanghai GM doubles exports of Chevy New Sail … Its main export markets include Chile, Peru, Algeria, Ecuador, Colombia and India.”

GM has been exporting from China for more than 10 years. It is shipping cars from China not just to smaller countries in China’s periphery, as Martin said. The cars go to South America, Africa and the Middle East. Cars that go there from China don’t go there from America. GM wasn’t bailed out to create jobs in China. It was bailed out to create jobs in America. It wasn’t bailed out so that its spokesmen can lie to the taxpayers that were forced to fund the bailout.

 

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27 Comments on “GM Denies Car Exports From China, Grows Nose...”


  • avatar
    gslippy

    Certainly the UAW rep on GM’s board has nothing to say about this.

  • avatar
    thornmark

    >> “the first time a world-class automaker will export from China a model..”<<

    "Cadillac recalls SRX crossovers for possible wheels coming off"
    http://www.examiner.com/article/cadillac-recalls-srx-crossovers-for-possible-wheels-coming-off

    World class isn't what it usta be.

  • avatar
    28-Cars-Later

    Bertel’s research is very telling, they were just waiting for the right time to announced fully built vehicles would be imported to NA. Heck had 2008 somehow not happened, they may have started importing by now with a nice spin about how great it was consumers could save 1 grand or 2 over the NA built product.

    In my view GM was originally bailed out when it was for three reasons, none of which were ‘mericcan jobs:

    -Given the timing of 2008, no other private entity could or would have taken on such a bankruptcy.

    -The socio-political implications of a GM/Chrysler liquidation would have a domino effect down the chain to suppliers, dealers etc and literally create a visible economic depression (unlike the hidden depression we are in). That wouldn’t play well with the plebs.

    -Political capital owed to UAW by both parties.

    GM utilizing its slave labor production capacity in the East to produce more cheap product for export is not only logical, it was always the plan despite any bailout.

    • 0 avatar
      sunridge place

      Good lord…what part of this makes you think they are planning to export from China to the US?

      You are following the Ed Niedermeyer way of thinking too now? Both Ed and Bertel always leave out the next part of the quote from the GM China President that basically says ‘I’m not the guy who makes those decisions’

      What should they do 28?

      Not sell cars in other smaller markets? Build factories in these tiny markets with capacities around 10,000 units a year? Build factories in the US to build the Chevy Sail (which wouldn’t sell at all in the US)to export to South America or Middle East?

      You seem to be suggesting one of the above. What would you do? Please, let us know.

      • 0 avatar
        28-Cars-Later

        A wise conglomerate tests the waters first, and doesn’t go head long into diesel engines that don’t work (Olds diesel) or premium car engines that melt engine blocks (HT4100).

        So you start with small components, ever seen Made in China on a GM Goodwrench boxes? I have. Then you start trying more complicated components such as engines, which is documented in the article. Later you export fully built models to the local region, and later other second and third world nations such as Gadaffi-era Libya and Chile. Now up exports to new countries and then add some BRICS nations such as India.

        I’m sure GM’s China boss doesn’t make the decisions, ultimately they will come from RenCen and possibly with the consent of the Chinese partners such as SAIC. Its not a grand conspiracy if a company who has been firmly entrenched in China for at least a decade decides to build cars for export from China. The outrage becomes we Americans bailed out the parent corp, to only see them invest more outside of the US, and later to re-import product back to the US which is inevitable. To answer your question, I would do exactly as they are and utilize cheaper Chinese production capacity to undercut the competition they really don’t have much of a choice because if they don’t eventually someone else will beat them to the punch (such as the Volkswagen octopus). The trouble is in the race to the bottom, we’ll destroy our regional economies and society in the process.

        • 0 avatar
          sunridge place

          Nice theory…yes, lots of car parts for all OEMs are Made in China.

          The Chinese engine for the last generation Equinox had more to due to Suzuki than Chevrolet as it was a joint project.

          http://www.nytimes.com/2008/03/26/business/worldbusiness/26chevy.html?_r=0

          The amount of hysteria over the export of about 4% of their annual production in China to low volume countries is amusing to read. Most of it comes from people with political agendas. Politics masquerading as automotive analysis is what Ed does for the most part now.

          This has more to do with factory utilization than cheap labor. I doubt auto workers in Chile would make much more than China. It just makes no sense to build a factory for a small # of units in those countries. Nor would it make sense to build a factory in the US for a product that isn’t sold in the US.

          • 0 avatar
            28-Cars-Later

            I agree it makes little sense to spool up a factory in low volume countries, but if simply better utilizing production capacity is the name of the game, Opel (and probably Holden) has capacity to spare. China was chosen in part because of cheaper labor costs, its certainly what any sound business would do given the opportunity.

            “Nor would it make sense to build a factory in the US for a product that isn’t sold in the US.”

            The trouble with this line of thinking is so many other industries have done precisely this, which is why so many things say “made in china”. You could certainly make the argument Michelin is building this 1.5 billion dollar plant in order to conquer part of the Chinese market, which is precisely what this article claims. But depending on tire demand, some of this plant’s production could foreseeablely be exported to other Asian markets, or North America. This is the lynchpin of globalization, build in one place, export everywhere. Its only a matter of time before it happens with automobiles on a larger scale.

            http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130129000007&cid=1102

          • 0 avatar
            sunridge place

            Fair enough…but

            ‘Opel (and probably Holden) has capacity to spare. China was chosen in part because of cheaper labor costs, its certainly what any sound business would do given the opportunity’

            Yes, I suppose they have capacity, but they are not tooled for the Chevy Sail. The Sail is a sub $10,000 car with approx 200,000 sales a year in China. Perhaps the plant has capacity for 300,000 if fully utilized with three shifts. Why retool in Australia/Europe when you have the tooling in China?

            If I have a plant that can crank out 200,000 units at two shifts–I can add a third shift and crank out 300,000 units with zero investment needed in tooling at other plants and export those extra 100,000 units.

            The main reason I suspect exports from China to other countries will remain a very small percentage of China production is the fact that increasing sales as all OEMs spread throughout the untapped parts of China will take the overwhelming majority of that production.

            I’m pretty sure GM’s future growth of exports in China has more to do with India than any other market. Not sure how that will work out–but do you really care if GM builds in India or China for sales in India?

            Finally–

            ‘China was chosen in part because of cheaper labor costs’

            No, China was chosen because some people predict they will be buying 25-30 million units a year in the next decade in China.

          • 0 avatar
            carrya1911

            > Nor would it make sense to build a factory in the US for a product that isn’t sold in the US.

            Well, several foreign auto makers have done precisely that. US plants export Accords, X5′s and other vehicles to destinations around the world.

          • 0 avatar
            sunridge place

            @carrya1911

            That is not the same thing. The Accord and X5 are also sold in the US along with those exports. My example was for the Chevy Sail which is not and will not be sold here.

            I cannot think of a single vehicle that is built in the US but not sold in the US.

            GM also builds and exports Escalades, Suburbans, Camaros etc in NA and exports to global markets.

  • avatar
    threeer

    Though assembled in Korea (with something like 60% Korean content), the Buick Encore is roughly 18% Chinese content…sad. While I grudgingly admit that it makes some sense for an auto manufacturer to make cars in the country they sell (see: BMW, VW, Mercedes, Honda, Toyota, Hyundai, Subaru…right here in America), I’d still prefer to see American workers bolting cars together to export around the world. Just gets hard to overcome that 25% tariff for China (that, or being forced into a JV or/and having your technology stolen). I’ll still attempt, as much as possible, to make sure my future car purchases are as American in build, content and company HQ location as possible (knowing how “challenging” that definition is).

    • 0 avatar
      28-Cars-Later

      I have a similar dream of Americans being the ones building the products for export, but for the foreseeable future I don’t think this is going to be the case.

  • avatar
    challenger2012

    I think Bertel should keep this cartoon and use it when he states that there are not any barriers to foreign car makers from building in Japan. Just this week, two more Japanese auto parts executives (Yuji Suzuki and Hiroshi Watanabe) pleaded guilty for price fixing, and this was for the US auto market. This brings the total to 14 convicted. These guys will be doing prison time.

    • 0 avatar

      And what does price fixing, where parts makers collude to screw purchasing departments of carmakers who want to screw partsmakers, what does that have to do with barriers to car importation to Japan?

      And why is importation to Japan mentioned in an exports from China story?

      Desperation must be high. You want Pinocchio as an avatar?

      • 0 avatar

        The only deperation I see is this site grasping at straws trying as hard as possible to feed the lemmings a constant supply of gm hatorade. Must be hard now that GMis 30 percent more profitable than honda and 40 percent more profitable than nissan. Ford is twice as profitable as honda, this with massive losses for ford in europe and record low yen pimping honda profitsm well I guess all the little people with tiny peckers need to unite against the big bad bully, GM

      • 0 avatar
        challenger2012

        Let me spell it out, extortion. You want wheel bearings for your auto assembly plant (in Japan) Mr. Ford, it will cost 3 times the going rate. Or a supplier gets a phone call from Toyota stating that it would be in his best interest for him not to sell batteries to Mr. VW if he wants to continue with his contact with Toyota. 14 are convicted in the USA, how much worse do you think it is in Japan?

        Don’t you think it is odd that not one foreign car maker builds in Japan, not VW, Audi, MB, BMW, Fiat, Citroen, GM, Ford, Kia/Hyundai, Renault, yet you see these car makers with plants all over the world.

        I commented on the photo, not the story.

        • 0 avatar
          Summicron

          “Don’t you think it is odd that not one foreign car maker builds in Japan…?”

          What an excellent elephant-in-the-room question.

          But since it offers the off-topic relief valve, I doubt he’ll stand and deliver.

  • avatar
    Conslaw

    The only way exporting Chinese-assembled cars to the United States would be politically viable would be to cap the imports at the # of US-built cars that are exported to China. I’m not sure the American public cares that much if GM exports Chinese-made cars to markets other than US/Canada.

  • avatar
    wmba

    As I never tire of reminding readers, 20% of GM’s bailout money came from Canada, and it still has a representative on the GM board. Canada is a foreign country. We didn’t provide funds to the bailout to create jobs in the US. We did it to retain jobs in Canada, and now they’re waffling about that, which pisses me off.

    Mexico put precisely nothing into the bailout, and yet they get new GM jobs, because they have cheap labor and can export duty-free to the US and Canada because the three countries are in a free-trade zone known as NAFTA. Now therein lies an injustice to Canadian and US taxpayers who funded the bailout.

    On the other hand, Chinese and Mexican GM factories existed before the bailout, so if I stop being cheesed off and act more rationally, then it makes sense to me for GM to continue to operate those factories post bailout, build sales, up the stock price so we can cash in our shares at a profit and get the hell out.

    The side benefit woukd be to stop the petty bickering about what GM should build and where. It’s tiresome.

    And yes, GM employs poor quality executives like Socia who can’t remember everything and utter spin like a politician. Call it lying if you want. Otherwise this latest revelation is just an attempt to stir up the pot. If you get anywhere, let me know. We Canadians want our 20%.

    • 0 avatar
      sunridge place

      Socia didn’t spin. He actually answered a question (at a press conference in China) honestly about whether GM ‘could’ export from China to the US. People like Ed Niedermeyer and Bertel like to carve out part of his answer to make whatever point they are trying to make while ignoring the rest of his answer.

      The PR guy gave a bad answer at first. Have no idea why since GM has issued press releases for just about everything Bertel quoted about Chinese production.

      My suspicion is that he answered dumbass questions about Cadillac expansion in China a few mohths ago from the likes of Chris Butler so many times he just repeated the same answer without thinking about it.

      In Cadillac’s case, cars built in China are sold there and he probably mixed up his answer. Bertel wrote the piece above as if he lied about it…which made for a nice story.

      PR people should stick to the script….he just picked the Cadillac facts instead of the Chevy Sail facts.

      Otherwise, I agree with everything you wrote.

  • avatar

    “…Fits are in Canada and elsewhere without giving people fits”

    Was this on purpose?

  • avatar
    geozinger

    “We know China-made Honda Fits are in Canada and elsewhere without giving people fits.”

    Thanks for the acknowledgment, Bertel. I bring this up every time.

    Honda is the FIRST (and ONLY) to sell Chinese assembled vehicles in North America.

    All of this other stuff is conjecture and flame baiting. The threat of Chinese cars in North America is not from GM or Geely or anyone else.

    But Honda.

    That is the only solid fact in all of this waste of electrons.

    • 0 avatar

      Geozinger, I did a review of one late in 2012…

      • 0 avatar
        geozinger

        As I recall, the car had some production variations compared to Japanese-sourced models, but otherwise satisfactory.

        However, that is not my point of my post. This trope about GM importing Chinese-assembled cars to North America hasn’t happened. It’s been trotted out several times as ancillary arguments against the bailout. The fact remains Honda is the only large scale importer of Chinese-assembled, road-legal vehicles.

        • 0 avatar
          corntrollio

          Agreed, it’s a poorly argued point that one needs to go through contortions to believe.

          Increasingly, Chinese production costs keep going up and up relative to US production for US consumption. There won’t be much of a benefit to exporting Chinese made cars to US soon, and many argue there isn’t a benefit now.

  • avatar
    dvdlgh

    It was about one month ago that I looked at a new Encore on a local (south central WI) dealers lot. One of the first things I noticed was 52% Korean and 17% (maybe it was 19%) Chinese content. I realize that this makes economic sense for GM but it does the opposite for me. Deal breaker!


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